Base rate cut 0.25% first time since Aug 23

Catplan

Base rate reduce by .25% hardly unexpected.

Hoenir

Catplan said:

Base rate reduce by .25% hardly unexpected.

Considering that earlier in the year social media expectations were for up to 7 cuts this year. Shows how pointless the continual speculation has become. 

gravel_2

Let's see how quickly and sharply savings rates follow (or don't).

DavidAC

From BBC news "The Bank is forecasting that inflation will increase to about 2.75% later this year, before returning to its 2% target next year"

The BoE cuts rates now when it forecast's inflation to go up above target. Why? You would have thought they would have learned.

InvesterJones

DavidAC said:

From BBC news "The Bank is forecasting that inflation will increase to about 2.75% later this year, before returning to its 2% target next year"

The BoE cuts rates now when it forecast's inflation to go up above target. Why? You would have thought they would have learned.

They explained that with the second part of your quote - they expect it to return to target (and actually slightly fall below, it looks like)

Tax_Slave

InvesterJones said:

DavidAC said:

From BBC news "The Bank is forecasting that inflation will increase to about 2.75% later this year, before returning to its 2% target next year"

The BoE cuts rates now when it forecast's inflation to go up above target. Why? You would have thought they would have learned.

They explained that with the second part of your quote - they expect it to return to target (and actually slightly fall below, it looks like)

How will the above inflation pay rises for public sector impact inflation?
I expect it will.

thegentleway

Tax_Slave said:

InvesterJones said:

DavidAC said:

From BBC news "The Bank is forecasting that inflation will increase to about 2.75% later this year, before returning to its 2% target next year"

The BoE cuts rates now when it forecast's inflation to go up above target. Why? You would have thought they would have learned.

They explained that with the second part of your quote - they expect it to return to target (and actually slightly fall below, it looks like)

How will the above inflation pay rises for public sector impact inflation?
I expect it will.

I think it's misleading to call it above inflation. You need to compare the pay rise to the cumulative effect of inflation since the last pay rise...

InvesterJones

Tax_Slave said:

InvesterJones said:

DavidAC said:

From BBC news "The Bank is forecasting that inflation will increase to about 2.75% later this year, before returning to its 2% target next year"

The BoE cuts rates now when it forecast's inflation to go up above target. Why? You would have thought they would have learned.

They explained that with the second part of your quote - they expect it to return to target (and actually slightly fall below, it looks like)

How will the above inflation pay rises for public sector impact inflation?
I expect it will.

Mr Bailey also covered that - it won't. Private sector is more of a concern for that.

eskbanker

Anyone tempted to comment speculatively, based solely on the headline, really ought to take the time to read the full document where they show their workings:

https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2024/august-2024

There's obviously still plenty of scope for discussion but informed debate based around the bank's published reasoning would seem more productive than guesswork!

Hoenir

DavidAC said:

From BBC news "The Bank is forecasting that inflation will increase to about 2.75% later this year, before returning to its 2% target next year"

The BoE cuts rates now when it forecast's inflation to go up above target. Why? You would have thought they would have learned.

If my maths is correct. 5% is well above 2.75%.  Plenty of margin of error as matters stand. Needlessly to say cates can raised in the future. If an inflationary shock such as war in the Middle East were to hit global markets. 

MX5huggy

Hoenir said:

DavidAC said:

From BBC news "The Bank is forecasting that inflation will increase to about 2.75% later this year, before returning to its 2% target next year"

The BoE cuts rates now when it forecast's inflation to go up above target. Why? You would have thought they would have learned.

If my maths is correct. 5% is well above 2.75%.  Plenty of margin of error as matters stand. Needlessly to say cates can raised in the future. If an inflationary shock such as war in the Middle East were to hit global markets. 

But 5% is the BoE base rate (interest rate) and 2.75% is a predicted inflation rate next year. No one is trying to get the 2 separate numbers to match.